Peter Drucker has taught us that if we want to plan for uncertainty we must ask ourselves, “What has already happened that will create our future?” Over the last two years, I’ve traveled the country as part of my Impact & Excellence book tour asking government and nonprofit leaders this very question. I have found that six main themes have emerged as shifts that will likely shape the future of the sector.
- Redefining Accountability
- “What Works” Requires Investment in Data Collection
- Behavioral and Mental Health is Finally Getting Attention
- Succession Planning is Needed
- High-Performance Measurement Cultures Pay
- Collaboration is King
Hot Topic #4 Succession Planning is Needed
Nearly 10,000 baby boomers are retiring daily[1]! This staggering figure is hitting nonprofit and government organizations in profound ways. For example, the Social Security Administration reported that in 2015 nearly 33 percent of their workforce, including 48 percent of their supervisors were eligible to retire. Our clients and workshop attendees have shared similar stories. The significant loss of institutional knowledge and fear associated with the perceived threats of retirements are stagnating (and sometimes weakening) many organizations’ impact and ability to achieve their mission effectively.
Leadership Musical Chairs
In many communities, baby boomers’ exodus has led to an unsettling cycle of leadership changes across the government and nonprofit sectors. When one baby boomer retries, the smaller pool of qualified Gen X and Millennials are standing in line to advance their careers. This has resulted in a jockeying of highly talented leaders moving from one organization to another, taking their institutional knowledge, relationships, training and skills with them. Although this advancement helps one leader and organization, it creates a vacancy in another organization. The new resignation leaves the board or human resources department of the former organization with the task of replacing their top talent, and the cycle of leadership musical chairs continues.
Potential Talent is Not Development
The easiest and most efficient way to deal with increasing retirements is to promote from within. This approach saves the expenses and time related to recruitment and searching processes. When done correctly, this process is the least disruptive and organizations experience little loss of momentum towards established goals and mission.
Despite these advantages, many social sector organizations have been unable to benefit from this easy approach due to underdeveloped leadership pipelines. Limited investments in leadership training leaves the organization unprepared to have a candidate to step up into the empty position. Promoting a leader who is not ready for a position can set an organization back months if not years. Valuable time, energy and resources are spent as the new leader develops the necessary skills and knowledge for their new position. We’ve heard horror stories from the field about the selection of an underdeveloped leader which resulted in greater organization-wide turnover, poor decision making, and a loss of reputation in the community. All of these activities are unwanted distractions taking a government and nonprofit further away from its important mission.
A Government and Nonprofit Model for Succession Planning
The need for leadership succession occurs in two different ways. The first is planned like in a tenured leader’s retirement. The second occurs unexpectedly through illness, unexpected situations, and current leaders moving on to new opportunities. Due to lean budgets in government and nonprofit sectors, the traditional model of succession planning (where a high-potential employee is groomed and then seamlessly moves into the position when the original leader leaves) is an unrealistic scenario. In addition, voluntary boards and taxpayers might find the time and leadership demands that this type of succession planning requires an unnecessary or an ineffective use of precious resources.
Despite these concerns, ignoring succession planning in government and nonprofit organizations is irresponsible for its constituents and clients. Without it, organizations become destabilized and are sometimes even in danger of collapse!
Recognizing this dilemma, the Annie E Casey Foundation has created a free resource outlining an alternative approach to succession planning. This valuable monography outlines approaches to succession planning that are tailored to the needs and realities of the social sector.
Seven Strategies for Successful Succession Planning
Instead of preselecting the next leader, government and nonprofit organizations can prepare for a successful succession, whether planned or sudden, by having specific organizational elements and best practices in place. Review the following list of seven questions and focus on which ones you answer “no”. If you work to build this capacity into your organization’s structure, you will increase your readiness for successful leadership transition.
- Do you have a current and actionable three-year strategic plan in place?
Having a strategic plan in place that includes measurable objectives in areas of growth, outcomes, and leadership development will allow interim leadership or a new hire to quickly become up to speed on the most pressing issues of the organization. This strategic plan will allow the organization to keep moving towards its goals even in a time of transition.
- Do you have a system for performance reviews for top leaders and supervisors?
All executive directors and top leadership should be evaluated at least annually on how well they are accomplishing the strategic goals and general performance. This system of evaluation will reinforce the agency’s commitment to these goals and the leadership skills expected to be successful.
- Do you have a plan to invest in talent development?
Leader development should be a priority for every organization. Building leadership skills of staff at all levels does not have to be cost prohibited. Organizations should encourage staff to attend trainings which will benefit the organization for the long run. Recognizing the need of government and nonprofit leaders in an effective and efficient manner, we created the Social Sector Leaders Academy, an online community that contains a five-part video course that dives deep into the skills of the high-achieving social sector leader.
- Do you hold regular strategic planning meetings and prepare executive director reports?
At least quarterly, the board and/or leadership team should review the key objectives and continue to expect that the organization is moving forward. There should be a commitment to the executive committees to continue these practices even in times of transition.
- Do you have a practice in place for shared leadership and high-performance?
The top management team should be expected to strive to be a cohesive culture where members support each other in achieving goals. One leader should not hold the knowledge for all decision making authorities. The team should share responsibilities for leading the organization to move the strategic plan forward. As a result, if one person is unable to perform their responsibly, others are prepared to step in and fulfill those roles.
- Are external relationships managed by more than one person?
When a leader walks out the door, relationships should not go with them. It is important that multiple people share important external relationships with major donors, clients, community leaders, funders, etc.
- Do you have a highly detailed operational manual?
It is important that every organization has documented its overall key purpose, how decisions are made, and how administrative systems and key activities are to be performed. This will allow other staff to carry out duties in an emergency without the organization losing momentum.
Although putting these elements in place can often seem overwhelming, it is worth the effort in more ways than one. These best practices not only create a smooth transition if a key leader leaves, but they often result in organizational growth and maturation. Establishing these practices communicate to funders and other key stakeholders that your organization is serious about accomplishing your mission regardless of what circumstances come your way. Funders, including taxpayers, like to support smart and strong organizations!
Take the First Steps
Check out socialsectorleadersacademy.com for a free three-part training series on leadership development. If you are seeking assistance to help you develop your strategic plan or establish key performance measures, Measurement Resources is here to help! Contact us today to schedule a call to explore why we have the best solution for you.
Also, visit next week to learn more about high-performance culture development and the amazing results leaders are experience when they adopt them.
[1] http://www.pewresearch.org/daily-number/baby-boomers-retire/
